{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-28T03:41:22-04:00", "answer_date": "2024-06-28 03:41:22", "is_docs_available": null, "is_excel_available": null, "is_pdf_available": null, "count_file_available": 0, "main_page": "student_question_view", "question_id": "4232873", "url": "\/study-help\/questions\/based-on-your-study-and-analysis-of-the-article-1-4232873", "question_creation_date_js": "2024-06-28T03:41:22-04:00", "question_creation_date": "Jun 28, 2024 03:41 AM", "meta_title": "[Solved] Based on your study and analysis of the A | SolutionInn", "meta_description": "Answer of - Based on your study and analysis of the Article 1 below, identify and explain a range of theories\/principles you have | SolutionInn", "meta_keywords": "based,study,analysis,article,1,below,identify,range,theories\/principles,studied,part,contemporary", "question_title_h1": "Based on your study and analysis of the Article 1 below, identify and explain a range of theories\/principles you have studied as part of Contemporary", "question_title": "Based on your study and analysis of the Article 1 below, identify", "question_title_for_js_snippet": "Based on your study and analysis of the Article 1 below, identify and explain a range of theories principles you have studied as part of Contemporary issues in accounting theory that you can see are being illustrated Use the facts of the article in your explanation Article 2 Linden, Andrew, The CPA saga demonstrates why Australia's corporate governance code needsreplacing The Conversation (online) 21 6 17, np The ongoing saga involvingCPA's board of directors and CEO Alex Malleyhighlights the need for a new corporate governance code in Australia The CPA, while not a publicly listed company,adheres to the ASX Code of Corporate Governance in fact the CPA assisted the Australian Stock Exchange (ASX) in writing its code It is essential that the ASX code is replaced by a new code written by an independent body, in conjunction with stronger legislation This will help combat future corporate governance scandals While the ASX code only directly applies to commercial corporations listing on the exchange, its governance principles are used to benchmark best practice elsewhere Community organisations,sports, schools,universities, professional bodies and governments use or invoke the ASX code For example, non listed organisations have used the ASX code to align executive remuneration with corporate peers It has also been used to replace elected directors with non executive independent directors those with no direct links to either management or substantial shareholders How did we get here As a tool of industry self regulation, the ASX code was written by, and for, corporate insiders The ASX code was developed by theCorporate Governance Council, a body reporting to ASX Limited, owners of the exchange The council is not monitored by a government body, and its members are not elected Members of the Corporate Governance Councilinclude the Business Council of Australia, and key professional groups such as the CPA This is highly problematic, not because industry groups are unimportant, but because other corporate stakeholders (i e employees) are excluded The role of the CPA in particular is conflicted because it also has been given the role ofregulating the professional standards of accountants who in turn audit companies In the wake of the collapse of theBank of Credit and Commerce Internationalin 1991, British accounting bodies the Financial Reporting Council and the London Stock Exchange established a Corporate Governance Committee chaired bySir Adrian Cadbury(Cadbury Committee chairman) to produce updated corporate governance guidelines Cadbury's committee reported in December 1992 that more independent directors should be appointed to company boards This was seen as a way of making boards more transparent and more accountable to shareholders, while also giving CEOs less power Australia had a similar catalyst for corporate governance change when insurer HIH went bust in 2001 It was this A$5 billion collapse that prompted a response from the ASX, after the government announced aRoyal Commissionin 2003 The commission identified failures in governance related tomismanagement, accounting issues and specific instances of breaches of directors duties Royal Commissioner Justice Owen noted that All those who participate in the direction and management of public companies need to identify and examine what they regard as the basic moral underpinning of their system of values Spurred on by the HIH findings and mirroring the strategic timing of the earlier Cadbury Report in the UK, the ASX adopted its code in 2003 Both Cadbury and the ASX ignored long known problems with the single board structure a solitary board of directors consisting of executives and various others Research showsthat this structure entrenches the power of executive directors, especially CEOs As heads of the corporate hierarchies,CEOs have very wide personal discretion, personal access to immense resources and control over information Board elections in a single board system are often undemocratic, because the board itself typically sets rules on who can run for election The code's application has created adverse effects An example is the failure ofPrinciple 8in the code to remunerate fairly and responsibly to control therapid escalation in CEO compensation For example, the vague wording of Principle 8 has translated into executives receivingexorbitant pay packets Two ad hoc legislative changes, the 2010two strikesrule that allows shareholders to vote on executive remuneration and proposed rules forexecutive remuneration in the banking industry, are attempting to clean up the mess the ASX Code has created Moving towards a German model Germany has been farmore successful in preventing corporate governancescandals This is partly due to the fact that their corporate governance code was developed by a commission created by the German federal government The commission included employee elected and union nominated supervisory board members, management board members (executives) and community representatives This commission has beenmore effectivebecause it operates in public and has focused on supporting the intent of the existing legislation Research has indicated that a state commission is less likely to be hijacked by a single vested interest group In addition, they also exert greater ability to make corporations accountable It is notable the German commission is overseen by the Minister of Justice and Consumer Affairs This approach reflects the German government's continued commitment to the idea of social partnership My research in Germany indicates this commitment in also widely shared in the community, inside German companies including their boardrooms and by key actors such as business associations and unions The German system mandates the need for a two tiered board structure opposed to our single board system A two tiered system includes a supervisory board made up of up to half employee elected and or union nominated directors and shareholder elected members This supervisory board appoints and oversees a separate management board This legal separation of executive and non executive directors, coupled with broader representation on supervisory boards,constrains CEO power and pay The two tiered board structure prevents German managers from controlling the election of supervisory board members Owner elected supervisory board members also have access to information and perspectives that are not voiced in Australian boardrooms Employees'share of profit has been reducedover the last decade in Australia and the US However, German employee and union nominated directors on supervisory boards have prevented a similar reduction As a result, income inequality is less of a problem in Germany Adopting a German style code is not the only change that must be made to rebuild our broken corporate governance system Legislative changes such asadopting two tiered boards, introducing employee elected union representation on boards and re emphasising director duties are just three of many vital changes that must be made What all Contemporary issues can be indentified from accounting theory explain the same ", "question_description": "

Based on your study and analysis of the Article 1 below, identify and explain a range of theories\/principles you have studied as part of Contemporary issues in accounting theory that you can see are being illustrated.Use the facts of the article in your explanation.<\/em><\/p>

<\/p>

Article 2: Linden, Andrew, The CPA saga demonstrates why Australia's corporate governance code needsreplacing. The Conversation (online).<\/em> 21\/6\/17, np.<\/strong><\/p>

The ongoing saga involvingCPA's board of directors and CEO Alex Malleyhighlights the need for a new corporate governance code in Australia. The CPA, while not a publicly listed company,adheres to the ASX Code of Corporate Governance- in fact the CPA assisted the Australian Stock Exchange (ASX) in writing its code.<\/p>

It is essential that the ASX code is replaced by a new code written by an independent body, in conjunction with stronger legislation. This will help combat future corporate governance scandals.<\/p>

While the ASX code only directly applies to commercial corporations listing on the exchange, its governance principles are used to benchmark best practice elsewhere. Community organisations,sports, schools,universities, professional bodies and governments use or invoke the ASX code.<\/p>

For example, non-listed organisations have used the ASX code to align executive remuneration with corporate peers. It has also been used to replace elected directors with non-executive independent directors - those with no direct links to either management or substantial shareholders.<\/p>

How did we get here?<\/strong><\/p>

As a tool of industry self-regulation, the ASX code was written by, and for, corporate insiders. The ASX code was developed by theCorporate Governance Council, a body reporting to ASX Limited, owners of the exchange. The council is not monitored by a government body, and its members are not elected.<\/p>

Members of the Corporate Governance Councilinclude the Business Council of Australia, and key professional groups such as the CPA. This is highly problematic, not because industry groups are unimportant, but because other corporate stakeholders (i.e. employees) are excluded. The role of the CPA in particular is conflicted because it also has been given the role ofregulating the professional standards of accountants <\/u>who in turn audit companies.<\/p>

In the wake of the collapse of theBank of Credit and Commerce Internationalin 1991, British accounting bodies the Financial Reporting Council and the London Stock Exchange established a Corporate Governance Committee chaired bySir Adrian Cadbury(Cadbury Committee chairman) to produce updated corporate governance guidelines.<\/p>

Cadbury's committee reported in December 1992 that more independent directors should be appointed to company boards. This was seen as a way of making boards more transparent and more accountable to shareholders, while also giving CEOs less power.<\/p>

Australia had a similar catalyst for corporate governance change when insurer HIH went bust in 2001. It was this A$5 billion collapse that prompted a response from the ASX, after the government announced aRoyal Commissionin 2003.<\/p>

The commission identified failures in governance related tomismanagement, accounting issues and specific instances of breaches of directors duties. Royal Commissioner Justice Owen noted that: \"All those who participate in the direction and management of public companies need to identify and examine what they regard as the basic moral underpinning of their system of values.\"<\/em><\/p>

Spurred on by the HIH findings and mirroring the strategic timing of the earlier Cadbury Report in the UK, the ASX adopted its code in 2003. Both Cadbury and the ASX ignored long known problems with the single board structure - a solitary board of directors consisting of executives and various others.Research showsthat this structure entrenches the power of executive directors, especially CEOs.<\/p>

As heads of the corporate hierarchies,CEOs have very wide personal discretion, personal access to immense resources and control over information. Board elections in a single board system are often undemocratic, because the board itself typically sets rules on who can run for election.<\/p>

The code's application has created adverse effects. An example is the failure ofPrinciple 8in the code to \"remunerate fairly and responsibly\" to control therapid escalation in CEO compensation. For example, the vague wording of Principle 8 has translated into executives receivingexorbitant pay packets.<\/p>

Two ad-hoc legislative changes, the 2010two-strikesrule that allows shareholders to vote on executive remuneration and proposed rules forexecutive remuneration in the banking industry, are attempting to clean up the mess the ASX Code has created.<\/p>

Moving towards a German model<\/strong><\/p>

Germany has been farmore successful in preventing corporate governancescandals. This is partly due to the fact that their corporate governance code was developed by a commission created by the German federal government. The commission included employee elected and union nominated supervisory board members, management board members (executives) and community representatives.<\/p>

This commission has beenmore effectivebecause it operates in public and has focused on supporting the intent of the existing legislation. Research has indicated that a state commission is less likely to be hijacked by a single vested interest group. In addition, they also exert greater ability to make corporations accountable.<\/p>

It is notable the German commission is overseen by the Minister of Justice and Consumer Affairs. This approach reflects the German government's continued commitment to the idea of social partnership. My research in Germany indicates this commitment in also widely shared in the community, inside German companies including their boardrooms and by key actors such as business associations and unions.<\/p>

The German system mandates the need for a two-tiered board structure opposed to our single board system. A two-tiered system includes a supervisory board made up of up to half employee elected and\/or union nominated directors and shareholder elected members. This supervisory board appoints and oversees a separate management board.<\/p>

This legal separation of executive and non-executive directors, coupled with broader representation on supervisory boards,constrains CEO power and pay. The two-tiered board structure prevents German managers from controlling the election of supervisory board members. Owner elected supervisory board members also have access to information and perspectives that are not voiced in Australian boardrooms.<\/p>

Employees'share of profit has been reducedover the last decade in Australia and the US. However, German employee and union nominated directors on supervisory boards have prevented a similar reduction. As a result, income inequality is less of a problem in Germany.<\/p>

Adopting a German style code is not the only change that must be made to rebuild our broken corporate governance system. Legislative changes such asadopting two-tiered boards, introducing employee elected\/union representation on boards and re-emphasising director duties are just three of many vital changes that must be made.<\/p>

---<\/p>

What all Contemporary issues can be indentified from accounting theory? explain the same.<\/em><\/p>", "transcribed_text": "", "related_book": { "title": "Global Strategy", "isbn": "0357512367, 978-0357512364", "edition": "5th Edition", "authors": "Mike W. Peng", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/649592eaa157d_32303.jpg", "uri": "\/textbooks\/global-strategy-5th-edition-9780357512364", "see_more_uri": "" }, "free_related_book": { "isbn": "0971617910", "uri": "\/textbooks\/100-financing-for-your-new-home-guaranteed-no-fico-score-requirement-1st-edition-978-0971617919-256490", "name": "100 Financing For Your New Home Guaranteed No Fico Score Requirement", "edition": "1st Edition" }, "question_posted": "2024-06-28 03:41:22", "see_more_questions_link": "\/study-help\/questions\/business-corporate-finance-2020-July-01", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/refer-to-the-data-set-in-table--a", "description": "Refer to the data set in Table. a. What is the average price for the cordless telephones? b. What is the average talk time for the cordless telephones? c. What percentage of the cordless telephones...", "stars": 3 }, { "url": "\/study-help\/business-statistics-in-practice\/c-judging-whether-the-local-internet-service-slows-down-during-1983500", "description": "=+c) Judging whether the local internet service slows down during the day or at night.", "stars": 3 }, { "url": "\/james-albemarle-created-a-trust-fund-at-the-beginning-of-2016", "description": "James Albemarle created a trust fund at the beginning of 2016. The income from this fund will go to his son Edward. When Edward reaches the age of 25, the principal of the fund will be conveyed to...", "stars": 3 }, { "url": "\/study-help\/questions\/board-hw-1-prior-serv-costs-40000-employee-9840302", "description": "BOARD HW \\# 1 : PRIOR SERV COSTS =40,000 EMPLOYEE YRS TO GO \\begin{tabular}{ll} 1 & 5 \\\\ 2 & 4 \\\\ 3 & 3 \\\\ 4 & 2 \\\\ 5 & 2 \\\\ 6 & 1 \\\\ \\hline \\end{tabular} FIND THE AMORTIZ UNDER BOTH METHODS", "stars": 3 }, { "url": "\/study-help\/questions\/analyze-the-different-types-of-instructional-characteristics-that-a-training-3205528", "description": "Analyze the different types of instructional characteristics that a training program should have", "stars": 3 }, { "url": "\/study-help\/questions\/create-a-function-bookendlist-that-consumes-a-list-of-integers-716943", "description": "Create a function bookend_list that consumes a list of integers as a parameter and returns the first and last elements as a new list. If the original list is empty, return an empty list instead. Unit...", "stars": 3 }, { "url": "\/study-help\/questions\/rst-inc-2018-statement-of-comprehensive-income-net-sales-cost-5542144", "description": "RST, Inc. 2018 Statement of comprehensive income Net sales Cost of goods sold Depreciation Earnings before interest and taxes Interest paid Taxable income Taxes Net income Dividends paid Addition to...", "stars": 3 }, { "url": "\/study-help\/questions\/the-equity-section-of-benton-corporations-statement-of-financial-position-5709766", "description": "The equity section of Benton Corporation's statement of financial position as of December 31, 2018 is as follows: Equity Share capital-ordinary 5 par value; authorized, 2,000,000 shares; issued,...", "stars": 3 }, { "url": "\/study-help\/questions\/a-golf-ball-manufacturer-knows-the-cost-associated-with-various-718003", "description": "A golf ball manufacturer knows the cost associated with various hourly production levels, given below. Production Costs for Golf Balls Production (hundred balls b) 2 5 C(b) 8 = 11 14 17 20 Cost...", "stars": 3 }, { "url": "\/study-help\/questions\/the-integral-test-enables-us-to-bound-the-error-approximation-718016", "description": "The Integral Test enables us to bound the error approximation of the series 1 n=3 n (Inn)3 by the partial sum 8 = $20 20 1 n=3 n (Inn)3 What upper bound does it yield for the error s - 820 ? Give...", "stars": 3 } ], "next_back_navigation": { "previous": "\/study-help\/questions\/i-am-having-trouble-understanding-the-below-question-that-is-4232872", "next": "\/study-help\/questions\/luxury-auto-ltdltd-is-a-highend-auto-dealership-their-showroom-4232874" }, "breadcrumbs": [ { "name": "Study help", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers" }, { "name": "Business", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers\/business" }, { "name": "Accounting", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/business-accounting" }, { "name": "Based on your study and analysis of the Article 1 below, identify", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/based-on-your-study-and-analysis-of-the-article-1-4232873" } ], "skill_details": { "skill_id": "9", "skill_name": "Accounting", "parent_id": "1" } } } }